Meaning and calculation of the value ratio

The value ratio describes the share that an individual condominium owner has in the entire property. It refers only to the size of the ownership shares, not to their current market value. The value ratio describes a fraction of a whole. It is usually expressed in hundredths or thousandths – one could also say that it expresses how many percent or per mille of the total property is attributable to a condominium owner.

This becomes important when it comes to the common costs and burdens of the individual condominium owners. The value ratio is used when calculating the share of the common costs, but also, for example, when there is common income (e.g., from rental income) or a renovation fund. This makes it possible to determine who is entitled to which share or who has to pay how much.

Article 712e, paragraph 1 of the Swiss Civil Code (CC) stipulates that the value ratios of condominiums must be stated:

“The deed of creation must specify the spatial allocation and the share of each floor in the value of the property or building right in fractions with a common denominator.”

The value ratio is necessary in order to assess an individual’s property in relation to the bigger picture. This is important because a condominium cannot be viewed as a private apartment in isolation from the rest of the building. It is merely a part of a whole – people with condominium ownership therefore also have the right to use the common areas. This is usually necessary for the day-to-day use of the individual apartment – ​​for example, a house cannot exist without a facade and roof, and structural components such as the stairwell or front door are also necessary for use. As a condominium owner, you are part of a community. The larger your property, the greater the associated rights and obligations. The value ratio determines not only the share of the common costs, but also the degree of say an owner has.

This so-called co-ownership is accompanied by the right of shared use (see Articles 646 et seq. of the Swiss Civil Code). It is entirely normal that this gives rise to common costs. One of the obligations of condominium owners is to assume their share of these costs. And this share can be determined using the value share.

Article 712h, paragraph 1 of the Swiss Civil Code stipulates this as follows:

“The condominium owners must contribute to the burdens of the common property and to the costs of common management in accordance with their value share.”

According to Article 712h, Paragraph 2 of the Swiss Civil Code, common costs may include the following:

• ongoing maintenance for repairs, maintenance, and renovations of the property’s common areas
• administrative costs
• public contributions and taxes
• any interest and amortization payments to mortgage holders

However, the significance of the value share is not limited to the distribution of common costs. It also confers certain rights: The higher the value share, the more voting power and quorum a condominium owner generally has.

Finally, the renovation fund should also be mentioned in this context. Whether it exists is determined by the condominium association; it is not required by law. The fund is intended to finance inevitable repairs in the future. If a renovation fund exists, all condominium owners contribute money to it. The amount required for each condominium owner depends on the value of the property.

The value ratio does not provide any information about the actual monetary value of a condominium. Rather, it indicates the area-based share of the entire property owned by a condominium owner. It is therefore not about the financial value, but rather about the utility value of the condominium. Incidentally, the value ratio can be found in the land register. The individual ratios are usually calculated when the condominium is created and then immediately entered into the land register. They remain there long-term because they generally do not change – except in the case of renovations or similar.

When calculating the value ratios of condominiums, it is not the purchase price or market value that is important, but the usable area. This is then converted as a proportion of the entire property. The following areas are included in the calculation of the value ratio:

• Areas with special rights (i.e., one’s own apartment)
• Ancillary rooms, if these are provided with special rights (private basement compartment, garage)
• Areas with special use rights (e.g., a private garden area, a terrace)

The law clearly stipulates that some components can be excluded from the calculation of the value ratio of certain condominiums. This applies to components that are of no or only very limited use to the respective residential units (see Article 712h, Paragraph 3 of the Swiss Civil Code).

However, it is not only the area that is included in the calculation of the value ratio. Qualitative aspects can also influence the amount of the value ratio. Among other things, the following factors can affect the calculations:

• Apartment orientation (sunlight, view)
• Location in the building (floor)
• Noise disturbance
• Room layout

Sharply fluctuating apartment prices have no impact on the value ratio, as this only relates to the size of the affected areas. The apartment’s furnishings are also not taken into account when calculating the value ratio – after all, they can be replaced at any time.

Apart from the exclusions already mentioned, there is no universally used calculation template for the value ratio, either in law or in practice. To a certain extent, this is therefore always in the hands of the person responsible for the calculation.

The value ratios are calculated and entered by the owner of the property or the person who establishes the condominium. This usually occurs at the same time as the condominium is established, and the value ratios are also entered in the land register. They normally apply for the entire duration of the condominium – changes are difficult but possible.

In principle, the value share of condominiums does not change – this would only be the case if a renovation is carried out, for example, changing the layout and size of the individual apartments. The subsequent installation of a terrace for the exclusive use of a condominium owner could also affect the value share. In these cases, the value share can be subsequently recalculated and adjusted in the land register.

Changes to the value share must generally be confirmed by all parties involved and approved by the condominium owners’ meeting. Exceptions exist if the value share was incorrectly entered due to errors – in this case, an application for its correction can be submitted even without consent (see Article 712e, Paragraph 2 of the Swiss Civil Code).

What is the significance of the land register when purchasing a house?

The land register can be of great importance to prospective homebuyers or future landowners. It contains all the important details about a property that could be relevant to a person purchasing a home. The land register entry not only tells you who the legal owner of the land is, but also when the person acquired the property. The land register also states the area of ​​the property and which buildings are located on it.

If you want to build on the property or use it for other purposes, easements sometimes become important. These can affect the character of the property and sometimes even have negative aspects. These can include, among other things, implementation regulations, usufruct, or rights of way. Homebuyers should pay particular attention to the following rights:

• Right of residence: The beneficiary may live in the house or apartment – ​​often this right is valid for life.
• Right of way: Private paths on an adjacent property may be used because there are no separate paths.
• Usufruct: The beneficiary may use the land (live there, build on it, or rent it out), but assumes maintenance costs and taxes.
• Right of passage: Gas, water, or electricity lines may be routed through an adjacent property.

Easements come in many different forms. To fully understand what you are dealing with, it is best to consult a lawyer or notary. They can take a closer look at the land register extract and advise you on the purchase of the property or land.

If you want to buy land, ownership only transfers when you are registered in the land register, not when the contract is signed. A lawyer or notary can also help with this.